In The Digital Era, Hit Songs Aren't Everything

American Idol winner Phillip Phillips, whose song, "Gone, Gone, Gone," went to No. 24 on the Billboard Hot 100. Each time it's played in public, the song's writers get a royalty, which is tracked and collected by ASCAP. Bigger hits usually translate into bigger checks.

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Originally published on February 13, 2014 5:58 pm

Last year, American Idol winner Phillip Phillips released the song "Gone, Gone, Gone" from his debut album The World from the Side of the Moon. The song went to #1 on the Adult Alternative and Adult Contemporary charts and peaked at #24 on Billboard's pop song chart, the Hot 100. For Gregg Wattenberg, one of three credited co-writers of "Gone, Gone, Gone," the song's chart performance was of particular interest because it translated indirectly into cash.

"U.S.-only hit songs — when I say 'hit' I mean like top five, not like No. 20 — can generate anywhere from one to two million dollars in ASCAP monies," Wattenberg says.

Today marks the 100th anniversary of The American Society of Composers, Authors and Publishers, an organization that keeps track of "performances" of songs by its members and then tries to make certain those members get paid. Alongside its younger competitor, BMI, ASCAP works on behalf of hundreds of thousands of songwriters and music publishers by going into clubs, restaurants and sports arenas and tracking radio playlists, TV broadcasts and even hold music on telephone calls — any public venue that plays live or recorded music — and charging a fee for each song played. The rate changes depending on variables like the size of the venue, the time of day the song is played and the popularity of the song.

"ASCAP tracks all those plays, gives a credit to your name and says, 'OK, you had X amount of credits," Wattenberg explains. "'A credit with the stadium people is worth X per play. A credit with CBS is a different credit.' And it sums it all up and you get a statement, and you get a check."

When a song goes to the top of the charts, those play counts can skyrocket, and the checks follow. Wattenberg had one of those money-making top five hits in 2007 with another American Idol alum, Chris Daughtry. He co-wrote "It's Not Over," the lead single from Daughtry's debut album. The song went to No. 4 on the Hot 100.

As Jeff Lunden reported today on Morning Edition, ASCAP's original purpose when it was created in 1914 was to ensure restaurants and dance halls that played music paid the songwriters for the privilege. But ASCAP's 100 years have included litigation to make sure every new outlet where songs are played pays songwriters and publishers. Most recently, it's been in court fighting with the streaming service Pandora, which has been trying to lower its royalty rates.

In 2008, ASCAP published a position paper called "Music Copyright In The Digital Age," advocating for artists rights on the Internet, and warning, "While the growing ease of copying, storing and sharing music in digital formats offers tremendous opportunity to music creators, it also imperils their livelihood."

Songwriter Paul Williams was elected as ASCAP's president in 2009. Williams wrote the songs "Rainbow Connection" and "We've Only Just Begun" in the 1970s, and appeared on Daft Punk's 2013 album Random Access Memories (that was him accepting the Grammy for Album of the Year last month on behalf of the French duo, who spent the ceremony mute behind their customary robot helmets). Williams says that even though the Internet has already been reshaping the music industry for over a decade, this moment is kind of like the early days of cable television.

"Where we first began to collect from composers for their films that were shown on cable and television shows on cable, there was very, very small royalty involved," Williams says. "At this point, it's a very fair royalty. It's perhaps our largest single source of income to our writers, is cable. It's the last thing we would have thought of at the time."

Last year, ASCAP documented more than 250 billion song performances and paid out over $850 million to its members, a $24 million increase from 2012, which is even more remarkable when you consider that record sales have almost continually declined over the last decade.

But for songwriters whose music hasn't hit the top of the charts, ASCAP's system can seem less effective. Guitarist and composer Harvey Reid says he makes a full time living from his music, though mostly from performances and album sales, not royalties. He gets radio play on smaller stations, but says the way ASCAP tracks performances on radio is biased.

"They're more likely to sample radio stations that have higher listenership, so it's statistically rigged," Reid says. He was so fed up with ASCAP that he actually switched over to BMI, but he says they both seem to distribute the money the same way. "I've made 30-some recordings that have been played on the radio in this country for over 30 years and I've probably made a couple thousand dollars from the performing rights organizations, which is probably not accurate. And there's lots of people like me who are on the fringes of the whole industry. We don't get a voice much. But I guess that's life."

Both Reid and Wattenberg say they've seen the newest category of royalties — the money that comes from online streaming services like Pandora and Spotify — grow a little in the past few years. The ease of tracking this kind of play has some ASCAP members wondering if they even need the organization. A number of music publishers, including Sony and BMG, tried to pull out of ASCAP when it came to licensing rights for digital streaming. But a judge ruled that the blanket licensing agreement ASCAP has negotiated with music publishers covers ALL media — traditional and digital — and cannot be divided up.

That makes sense, says Casey Rae, the interim Executive Director of the Future of Music Coalition, a non-profit that lobbies on behalf of musicians. He says ASCAP has a distinct advantage when it comes to negotiating the hundreds of separate deals with venues, radio, TV, cable and streaming services. "I, for one, think it would be very, very difficult to create an institution to go around to every venue in the United States of American and then establish reciprocal agreements overseas and so on and so forth," Rae says. "I think that that's probably alone a case for their continued existence."

Rae agrees that lesser-known songwriters like Harvey Reid have had good reason to be frustrated with ASCAP's accounting and ways of tracking plays. But in the digital era, when it's possible to track a listener's every click, ASCAP is trying to adapt.

"We're not at 100 percent yet, but we're moving in that direction where we can track ... and properly pay for every performance," Williams says.

In a world where more artists are recording, publishing and distributing their music without labels, Williams thinks ASCAP and other performance rights organizations will only become more important.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, HOST:

And I'm Robert Siegel.

When you listen to a song on the radio or online, someone is keeping track of what's being played. Performing rights organizations do that to make sure songwriters and music publishers get paid. BMI is one of the big organizations that does this. The other is ASCAP, which turns 100 today. And in its old age, it's getting extra scrutiny for how it collects royalties in this digital world. NPR's Laura Sydell explains.

LAURA SYDELL, BYLINE: You may have heard this song.

(SOUNDBITE OF SONG, "GONE, GONE, GONE")

PHILLIP PHILLIPS: (Singing) When life leaves you high and dry, I'll be at your door tonight if you need help.

SYDELL: "Gone, Gone, Gone," which is sung here by "American Idol" winner Phillip Phillips, was co-written by Gregg Wattenberg. The song went to the top of the charts and that meant big bucks for Wattenberg.

GREGG WATTENBERG: U.S.-only hit songs could generate - when I say hit, I mean like top five, not like number 20 - can generate anywhere from one to $2 million in ASCAP monies.

SYDELL: A lot of that comes from radio play. But ASCAP got its start 100 years ago collecting performance royalties from dance halls and other live music venues. It still does. Any public place that plays live or recorded music from a club to a football stadium pays a licensing fee. The amount varies depending on its size, hours, popularity. The same is true for radio stations and online music streaming services like Pandora. Wattenberg says ASCAP pays him a percentage of the fees it collects based on how many times his song gets played.

WATTENBERG: ASCAP tracks all those plays, gives a credit to your name. And a credit with the stadium people is worth X per play. A credit with CBS is a different credit. And it sums it all up and you get a statement and you get a check.

SYDELL: But songwriters whose music hasn't hit the top of the Billboard charts have long said that the ASCAP system isn't as transparent as Wattenberg makes it sound.

(SOUNDBITE OF MUSIC)

SYDELL: Guitarist and composer Harvey Reid says he makes a full time living from his music, although he's never had a song top the charts. Most of Reid's income comes from performances and album sales, not royalties, though he does get radio play on smaller stations. He says the way ASCAP tracks radio play is biased.

HARVEY REID: They're more likely to sample radio stations that have higher listenerships, so it's statistically rigged.

SYDELL: Reid was so fed up with ASCAP he actually switched over to the other performing rights organization, BMI. But he says they both seem to distribute money the same way.

REID: I've made 30-some recordings that have been played on radio in this country for over 30 years, and I've probably made a couple thousand dollars from the performing rights organizations, which is probably not accurate. And there's lots of people like me.

SYDELL: However, Reid and Wattenberg say they've both seen the newest category of royalties grow a little in the past few years. The money comes from streaming services like Pandora and Spotify. ASCAP is an organization with a long history of litigation to make sure every new outlet pays songwriters and their publishers. Most recently, it's been in court fighting with the online radio service Pandora. Grammy and Oscar-winning songwriter Paul Williams is president of ASCAP, and he likens this moment to the early days of cable.

PAUL WILLIAMS: Where we first began to collect for our composers for their films that were shown on cable and television shows on cable, there was very, very small royalty involved. At this point, it's perhaps our largest single source of income to our writers is cable.

SYDELL: Last year, ASCAP documented more than 250 billion plays and song performances and paid out over $850 million in royalties. But the ability to easily track plays online has some ASCAP members wondering if they need the organization. A number of music publishers, including Sony and BMG, tried to pull out of ASCAP when it came to licensing rights for digital streaming.

But a judge ruled that the blanket licensing agreement ASCAP had negotiated with music publishers covers all media - traditional and digital - and cannot be divided up. Casey Rae is the interim executive director of the Future of Music Coalition, a non-profit that lobbies on behalf of musicians. He says ASCAP has a distinct advantage.

CASEY RAE: I, for one, think it would be very, very difficult to create an institution to go around to every single venue in the United States of America and then establish reciprocal agreements overseas and so on and so forth.

SYDELL: However, Rae agrees that lesser-known songwriters have good reason to be frustrated with ASCAP's accounting and ways of tracking plays. But in the digital era, every time a listener hits play on whatever device, it's possible to track it. ASCAP president Paul Williams say the organization is trying to adapt.

WILLIAMS: We're not at a hundred percent yet, but we're moving in that direction where we can keep track of and properly pay for every performance.

SYDELL: And in a world where more artists are recording, publishing and distributing their music without labels, Williams thinks ASCAP and other performing rights organizations will only become more important. Laura Sydell, NPR News. Transcript provided by NPR, Copyright NPR.